Legislation
An owners corporation is a separate legal entity, comprised of all the lot owners within the complex. An owners corporation is governed by specific legislation and by its own by-laws. There are a variety of structures and types of owners corporations permitted under the Act.
Common property
The common property for a strata scheme is owned by all the owners of lots included in the scheme as tenants in common. The share of ownership is proportionate to the interest lot entitlements. An owner's interest in a lot is inseparable from the owner's interest in the common property.
Common property includes: land within the scheme not forming part of a lot; utility infrastructure within the scheme; and owners corporation assets.
The body corporate must administer the common property and body corporate assets for the benefit of the owners of the lots included in the scheme. The maintenance and upkeep of common property is usually contracted out to a caretaker or building manager.
Levies
Owners corporation levies are issued by the body corporate to pay for such items as: the building manager's salary; the body corporate manager; other service contractors, and the ongoing maintenance and upkeep of the common property, plus insurance and utilities such as electricity.
The levies are divided into two (2) separate funds:
Administrative Fund
The administrative fund is for regular recurring expenditure and includes payments to service contractors, ongoing maintenance and repairs and the day to day upkeep of common property.
Sinking Fund
The sinking fund is a separate fund where money is put aside for future non-recurring maintenance or capital expenses (eg: painting of exterior surfaces) and the purchase of new body corporate assets. There is a requirement for all owners corporations to have a 10 year sinking fund forecast.
General Meetings
A general meeting is a meeting of all members of the
owners corporation.
At a general meeting, resolutions are passed among other things: to confirm the annual accounts; set budgets and levies; determine if an audit is required; and any other issue that requires a general meeting resolution. There is also an item of the agenda at every annual general meeting is the election of the committee.
The legislation prescribes the format of general meetings; the types of resolutions required; and who is eligible to vote.
Committee Meetings
Committee meetings are meetings of the committee members, and are held at regular intervals throughout the year.
The committee is comprised of the elected representatives of the owners and operates in a similar way to a board of directors to a company. The committee is made up of the following members:
- Chairperson
- Secretary
- Treasurer
- Ordinary members of Committee.
For details regarding these positions, please refer to the FAQ "The Role of the Body Corporate Committee"
Legislation
A
strata manager is a person or corporation who is appointed pursuant to the relevant Act with the power to perform certain duties and functions of the owners corporation and the committee as are delegated to it in an agreement.
The primary responsibilities delegated to a strata manager are the duties of the secretary and treasurer.
These include:
- Prepare and forward notices as required by the Act
- Prepare notices of committee and general meetings
- Attend and prepare minutes for committee and general meetings
- Attend to matters resulting from general and committee meetings
- Attend to all correspondence
- Keep the books, records and roll
- Levy owners and collect their contributions
- Prepare statements of account and annual budgets
- Pay accounts
- Effect all insurances and submit claims
- Make applications and submissions to the Adjudicator as "required"
- Recommend actions for committee and body corporate to ensure compliance with various legislations.
The owners corporation, however has the right to delegate only a proportion of these duties or to extend them - within the confines of requirements of the legislation.
A strata manager may also be delegated the powers of the Chairman, Secretary and Treasurer or other members of the committee. This delegation is particularly applicable to small owners corporation with absentee owners as it enables decisions to be made and action carried out when members of the committee cannot be contacted promptly.
Even though a strata manager has been appointed, this does not preclude the
owners corporation or its committee from exercising any of the powers which have been delegated to the strata manager - in fact the powers of the owners corporation and the strata manager run concurrently. A prudent strata manager does not usurp or override the decisions of a committee.
A strata manager must be appointed and the delegation made at a general meeting of the owners corporation. To ensure that all owners are aware of the terms of the agreement, a copy must be forwarded to all owners with the notice of the general meeting at which the appointment is sought.
A strata manager assists the committee to make the right decisions.
Essentially, the committee is charged with the day to day administration of the owners corporation.
So, what is a committee?
The committee is usually elected at each annual general meeting and contains at least three and not more than seven members. The committee consists of the executive members, (chairperson, secretary and treasurer) and the ordinary members.
The committee is charged with the responsibility to implement the decisions of the body corporate. Consequently, they must arrange for any resolutions passed by the body corporate in a general meeting to be carried out, whether it be to send levy notices based on the budget, obtain quotes or carry out works.
The committee also has the power to act for the body corporate. A decision of the committee is a decision of the body corporate, unless it is a restricted issue for the committee, in which case it does not have the power to make a decision on that issue.
Restricted issues for the committee include -
- Any decision which requires an ordinary resolution, majority resolution, special resolution, or unanimous resolution.
- Fixing or changing a levy
- Expenditure above the relevant limit for committee spending
- Commencing a legal proceeding (other than recovery of levies), and
- Making a decision on an issue where the body corporate has decided it is a restricted issue for the committee.
Powers and Duties
The powers and duties of the committee include -
- Keeping full and accurate records of meeting resolutions
- Carrying out resolutions passed either at a committee meeting or on voting outside a committee meeting
- Carrying out resolutions passed at a general meeting
- Preparing proposed budgets for adoption at each annual general meeting
- Issuing of S109 Certificates
- Making available the books and records for inspection by an interested person
- Giving notice of levy contributions
Delegation of Powers
A body corporate cannot delegate its powers.
However, under Chapter 3, Part 5 of the Standard and Accommodation Module Regulations, the body corporate may engage a body corporate manager and authorize the body corporate manager to carry out all the functions of the committee and each executive member of the committee. A special voting process is outlined in the Legislation to ensure the evoking of this Division is sought by the body corporate and is to be used in cases where the committee and or executive members of committee cannot operate.
The body corporate may also engage a body corporate manager and authorise the body corporate manager in writing to exercise the powers of the secretary and treasurer of the Body Corporate under the Act and the Regulation.
Despite this authorisation, the body corporate must not prevent the committee, or an executive member of the committee, from exercising an authorized power, or from directing a body corporate manager about how powers of the secretary and treasurer are to be exercised.
This means despite anything in a contract between the body corporate and the body corporate manager, a decision of the body corporate manager is void to the extent that it is inconsistent with a decision of the committee. This also means if the regulation module states the committee or an executive member must carry out a function, then it cannot be done by the body corporate manager unless specifically instructed by the committee or the executive member to do so.
Liability of Committee
Usually committee members take on this role in an unpaid capacity and it is for this reason they should be protected against any legal action which may be taken for any lawful decisions they have made.
Section 48A of the Building Units and Group Titles Act 1980 and of the Southbank Corporation Act (pursuant to the Schedule headed Modified Building Units and Group Titles Act (BUGTA) provided that no action shall lie against a committee member for any decision made in good faith and without negligence under the authority of BUGTA. No such provision has been included in the Body Corporate Community Management Act.
It is therefore understandable that the body corporate normally takes out errors and omissions liability insurance for the protection of its committee members.
The Responsibilities of the Treasurer
Although a treasurer must be elected each year, there is no specific mention of the role of the treasurer in the Body Corporate and Community Management Act or Regulation Modules. Specific reference is made in other forms of Body Corporate Legislation utilised in Queensland.
The treasurer's role is usually associated with the financial arrangements such as:
- Preparing a budget for adoption by the body corporate
- Sending notices of levy contributions or other amounts payable by lot owners
- Payment and recovery of contributions, and
- Keeping account records and preparation of annual accounts for presentation to the annual general meeting
Where a body corporate manager has been engaged by the body corporate, it is usual for these duties to be carried out by the body corporate manager.
The Responsibilities of the Body Corporate Secretary
The secretary has a number of important duties under the prevailing legislation.
Even though the body corporate may authorise the body corporate manager to exercise the powers of the secretary, this may not prevent the secretary from exercising a delegated power or directing the body corporate manager about how powers are to be exercised.
The secretary's specific duties are summarised below:
Committee Election
The secretary coordinates the committee election, including -
- Serving a notice on each lot owner inviting nominations for positions on the committee
- Acknowledging receipt of nominations
- Preparing ballot papers (either secret or open), if an election ballot is necessary
- Forwarding the ballot paper and ballot paper envelope with the notice of the annual general meeting
- Giving a ballot paper to a voter at an annual general meeting, if the voter has not previously completed a ballot paper
- Holding the completed ballot papers received before the annual general meeting pending the election, and
- Delivering the completed ballot papers to the person chairing the meeting
Committee Meetings
The secretary coordinates committee meetings by -
- Calling committee meetings
- Calling a committee meeting if requested in writing by enough committee members to form a quorum
- Giving notice of committee meetings:
- to committee members
- to lot owners (unless the lot owner has instructed he/she does not wish to receive a copy of the notice)
- by placing a copy of the notice on the body corporate's notice board (if it has one)
- sending a copy of committee resolutions (or minutes) to lot owners, unless the lot owner has instructed he/she does not wish to receive a copy of the resolution (or minutes)
General Meetings
The secretary's role in general meetings includes -
- Asking for submission of motions to be included on the agenda for the annual general meeting (this is done at the same time as calling nominations)
- Having available for inspection by voters:
- the roll
- a list of persons who have the right to vote, and
- proxy forms and voting papers
- The secretary would carry out other tasks such as:
- providing a copy of the minutes to each lot owner,
- attending to inward and outward correspondence,
- keeping the records accurate and up-to-date, and
- other administrative functions
Serving and Receiving Notices
As well as carrying out the functions specified in the legislation, various notices and other documents must be served on or given to the secretary.
These include -
- Written voting paper before the start of a general meeting unless a returning officer is appointed
- Notice of a requested extraordinary general meeting
- Nominations for committee positions
- Ballot paper before or at the annual general meeting
- Notice calling a committee meeting by enough committee members to form a quorum
- Notice by lot owner that he/she does not wish to receive committee meeting notices
- Notice by lot owner that he/she does not wish to receive committee meeting resolutions (or minutes)
- Notice of opposition of committee resolution
- Proxy from committee member before the start of a committee meeting
- Proxy from a lot owner before the start of a general meeting
- Proof of the representative capacity if a notice has been given to enter particulars on the roll concerning the representative of the owner, and
- Details of a corporate lot owner's nominee and any change of nominee.
Many of the above duties are carried out by a body corporate manager as part of the agreed services under a body corporate administration agreement. However, where the legislation specifically provides that the secretary or returning officer must carry out a stated function, the body corporate manager cannot carry out that function unless authorised by the secretary or returning officer to do so.
The Responsibilities of the Chairperson
The chairperson has a number of duties concerning the conduct of meetings. If the chairperson is not at a meeting, then a person entitled to vote is elected to chair the meeting.
The chairperson is entitled to call a committee meeting in the secretary's absence.
Duties at General Meetings
At general meetings the chairperson's powers and duties include:
- Chairing the meeting
- Ruling a motion out of order. The chairperson must give reasons for the ruling, although those present at the meeting may pass an ordinary resolution reversing the decision
- The chairperson may only rule a motion out of order if the motion (if passed) would conflict with the Body Corporate Community Management Act, the regulation module or the bylaws, or would be unlawful or unenforceable for another "reason"
- Declaring the results of voting on motions, including the votes cast for and against, and the number of abstentions from voting
Duties at Committee Elections
The chairperson also has an important role in counting the votes in an election ballot for positions on the committee.
Secret Ballot
If a secret ballot is held for an election, then the chairperson is responsible for -
- Scrutinising the particulars tab to confirm the person voting has the right to vote
- Detaching the particulars tab from the ballot paper envelope
- Placing the ballot paper envelope in a receptacle
- Randomly mixing the ballot papers, and
- Taking each ballot paper out of the envelope
Open Ballot
In an open ballot election, the chairperson must take the ballot papers out of their envelopes, and scrutinise them to confirm the persons voting have the right to vote.
Counting of Vote
The chairperson is also responsible for recording the count of votes in the minutes, declaring the result and stating the number of votes cast for each candidate.
To assist the chairperson in performing these tasks, the body corporate may appoint a returning officer to decide questions about eligibility to vote and to count votes.
